August 2001
EU Employment and Labor Policy Briefing
In the past seven months, the European Union has undertaken a number of new initiatives concerning employment and labor issues. These new proposals have focused on the revisal of current EU directives and seek to fill in the holes left by the treaties and directives already in force. The EU Charter on Fundamental Rights was proclaimed jointly by the European Parliament, the European Commission and the Council of the European Union in December 2000 in Nice. There are 54 articles under seven chapter headings. The EU has made it clear that this document is not conferring any new rights to the population, instead serves to make clear to the people their fundamental rights. The EU has also undergone research into the sustainability of pension systems and has completed recommendations to provide for said structures. There have been significant changes to the European Works Councils Directive this year in both France and Germany and the United Kingdom now falls into the works council structure of labor relations.
Recent developments in EU directives:
There have been three major new EU draft directives this year, all aimed at filling gaps in current legislation. The first of these, and by far the least controversial is a directive that deals with equal treatment of women in the workplace. Similar to measures previously taken to provide non-discrimination laws, the new directive will address gender issues specifically, as they are left out in current legislation. The draft calls on member states to consider the objective of equality based on gender when structuring new legislation and policies with a goal of eventual gender mainstreaming. Specifically, the directive states the following:
· It recognizes sexual harassment as a form of discrimination, bringing the violation under a 2000 Directive dealing with Equal Treatment in Employment and Occupation (2000/78/EC).
· An instruction to discriminate also constitutes discrimination, again bringing it under current legislation.
· It elucidates the right to provide for derogations, forcing member states to provide reasonable justification for banning women from specific occupations.
· The directive reinforces protection for maternity leave as well as protection of paternity leave, if provided already in the member state.
· It provides protection of single sex organizations, in language that seems to conclude that such organizations are capable of promoting equality.
This proposal will undergo a legal and linguistic finalization and then the position will be adopted formally. From there, the draft will go before the European Parliament before it becomes law.
A second key directive calls for requirements on exposure of workers to the risks arising from noise. This is the second in a series of health and safety directives that address new risks in the workplace first proposed in 1993, the first concerning vibrations. The final two directives will cover optical radiation and electromagnetic radiation. This directive sets the limit of noise levels at 87 decibels, hearing loss begins at 85 decibels. As such, employers will be required to provide individual hearing protection when the occupation exposes the worker to any level over 80 decibels. Employers are also obligated to do the following:
· Determine and assess risks;
· Avoid or reduce exposure;
· Provide personal protection;
· Limit exposure to the ear;
· Provide information and training to workers; and
· Consult and allow participation of workers in the implementation process.
Further, workers in sea and air transport sectors are included under this proposal, previously they were excluded.
The final proposed directive involves Information and Consultation of Employees. It seeks to establish minimum standards of consultation and informing workers in establishments operating within a single member state. This directive will complement the existing directives with provisions on information and consultation in situations of collective redundancies and of transfers of undertakings and the European Works Council Directive that applies to establishments operating in two or more member states. The substance of the directive involves what information is required to be transmitted and when/how consultation should take place. Employers would be required to provide information when probable developments will affect employment in regards to levels of employment, work organization, or contractual relations. Consultation must incorporate the following elements:
· Timing, method, and content must be appropriate to the situation;
· The Relevant level of management and representation must be involved;
· Relevant information must be supplied by the employer;
· The Employees’ representative must be able to meet with the employer and obtain a reasonable response to any opinion submitted; and
· All consultation must be done with a view to reaching an agreement on decisions within the scope of the employer’s powers.
The question of sanctions has not been decided, but there is agreement that they should be effective, proportionate and dissuasive.
These proposed directives will not become full legislation until they have been finalized linguistically. Then they will be submitted to the European Parliament, where they will likely receive unanimous support.
Developments on the Charter of Fundamental Rights of the European Union:
The Charter of Fundamental Rights of the European Union has been officially adopted by all three structures inside the European Union. Under a joint proclamation on December 7, 2000, the European Parliament, the European Commission, and the Council of the European Union set forth 54 articles of basic rights accorded to all citizens in the European Union. Of particular interest is Article 27, Workers’ right to information and consultation within the undertaking, which the above directive uses as a foundation.
The Charter faced considerable opposition from the United Kingdom during the drafting and adoption process. They have been quick to point out that the document is not legally binding and should only be used as a recommendation, not legislation. Many other member states plan to incorporate the Charter into national legislation, denouncing the U.K. position. How exactly the Charter will fit into legislation and more importantly into judicial proceedings remains to be seen.
Sustainability of Pensions:
The Employment and Social Affairs Commission proposed a formal communication on July 9 on the sustainability of pension systems that calls all states to provide adequate pension levels through integrated sustainability of said systems. The Commission provides three broad objectives to achieve this end; adequacy of pensions, financial sustainability, and adaptation of pensions to a changing society. Through these broad strategies, the Commission hopes that pension systems will be reformed to deal with the growing crisis of an aging European society.
On a similar theme, the European Commission released a proposal for the EU Sustainable Development on May 15. This proposal deals with broader sustainability issues, but briefly addresses the pension system problem. The report cites two major objectives to deal with the problem, combating poverty and social exclusion and dealing with the economic and social implications of an aging society. In the same document, there are two other proposed measures of relevance to labor issues. One proposal calls for the development by 2003 of a comprehensive community strategy on health and safety at work and the other for the promotion of telework.
Major Developments in European Countries:
Ø Germany
The German parliament passed a bill in June that strengthens the works councils in the state. According to this new legislation, there will be a simplified voting system for representatives to the works councils. It also reduces the number of employees a company must have, 200, before they have to provide paid time off to serve on a works council. Further, the legislation limits employers’ flexibility to use short-term job contracts and increased employees’ rights to part time work, seemingly paradoxical. To placate the employers’, the legislation adds rules that will expedite resolutions before labor boards and make those resolutions cheaper to process.
Most recently, a bipartisan commission appointed by the government released the opinion that Germany would have to open its doors to immigration if it is to remain an economic power in the coming century. This report states that a new immigration policy is necessary to achieve this goal. The ruling Social Democratic Party plans to draft legislation based on these findings and allow entry of some 50,000 qualified workers a year. This proposal will incorporate a plan that will seek balance in the diversity of workers who are admitted, combining permanent migrants, younger workers seeking training, and temporary workers intent on working in sectors experiencing labor shortages. This report based its figures on the demographic situation in Germany; they look to lose 15 million people from the workforce in the next 50 years due to the aging population and declining birth rate.
Of particular interest, especially related to ILO concerns, is the merger of five separate trade unions in Germany into the Union of Service Trades Unions. The unions cited membership recruitment concerns as the driving force behind the merger which brings together the significant sectors in the service economy: Public services, Transport and communications, White-collar workers, Commerce, banking and insurance personnel, Postal workers and media staff. This new union boasts 3 million members and is now the world’s largest single trade union.
Ø France
Stemming from massive layoffs by two major employers in France, Danone and Marks & Spencer, new legislation has been proposed in France that will significantly strengthen workers’ rights. Through a series of new measures, the cost of cutting jobs will be greatly increased. The first of the measures will double the minimum compensation paid to cut staff and a mandatory “job conversion” with an employee’s contract extended through the period of re-training. The other central measure will strengthen the works councils, imposing longer notice periods and additional obligations on profitable companies to provide alternative jobs and retraining instead of straight job cuts. There will also be a 21-day delay period before any redundancy program is announced, giving the workers greater time to challenge any downsizing and consult with the company. The legislation is expected to become law by October.
This legislation will greatly increase the cost of cutting jobs much to the chagrin of French businessmen. They claim that the government is systematically destroying any future foreign investment in France by creating labor laws that deter investors. In fact, in light of the new legislation, many companies have begun to move their operations out of France before the laws come into effect.
Ø United Kingdom
Of significant note in the United Kingdom, the new directive proposed by the European Union concerning information and consultation of workers as explained above, will force Britain to accept Europe’s system of works councils. Previously, the UK had no such system of consultation. The UK has always been subject to the directive that establishes works councils in multinational companies, but will now be compelled to use the system domestically. Britain fought the measure from the beginning but lost out to Germany and France who support works councils, as noted above.
